Use the Following Information for Questions

question 87

Multiple Choice

Use the following information for questions.
Hudson, Inc.is a calendar-year corporation.Its financial statements for the years 2011 and 2010 contained errors as follows:
-Assume that the proper correcting entries were made at December 31, 2010.By how much will 2011 income before taxes be overstated or understated?

• A)$1,000 understated
• B)$1,000 overstated
• C)$2,000 overstated
• D)$5,000 overstated

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Definitions:

Underemployment

A situation in which workers are employed in positions requiring less education and skill than they have.

Productivity

A measure of the efficiency of production, often calculated as the ratio of outputs produced to inputs used.

Capital Flight

the large-scale exodus of financial assets and capital from a country due to economic instability or unfavorable investment conditions.

Demographic Transition View

A model explaining how changes in birth and death rates can affect the age and growth dynamics of a population over time.